Financial Ratios as Predictors of Bankruptcy in Slovenia: A comparison of nonparametric, semi-parametric and parametric techniques. Abstract Financial stability of companies is of concern to employees, investors, bankers and government and regulatory authorities alike. Indeed, recent literature on global financial downturns includes the theory that balance sheet fundamentals may provide warning of impending crisis. This paper presents five alternative techniques that can be used in a study regarding financial ratios as predictors of Slovenian corporate failure, evidenced as bankruptcy. First, non-parametric and parametric techniques are compared in the variable selecting process. Second, semi-parametric techniques and standard logit model are discussed in predicting default. The case of Slovenia is chosen, since it is a transition country and a new member EU state, with the financial market still underdeveloped relative to the »old« EU. In such an economy development of robust models for predicting bankruptcy is of immense value.
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